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Picture 23 Dominic Schofield is a former Westminster City Councillor and two-time parliamentary candidate.

The ‘noughties were good times for Spain.  Rising prosperity.  The bursting onto international markets of a new commercial armada of seemingly irrepressible companies like Grupo Santander, Telefoníca and Ferrovial.  Spain’s principal cities enjoyed a renaissance, becoming major international centres for fashion, culture, sport as well as business in the process.

The sharp reverse to bust has been particularly rough.  Unemployment at 20% is the highest in the developed world.  The deficit stands at an eye-watering 11.1% of GDP – and means that Spaniards stand at a junction with two painful choices:  the road to austerity or the road to Athens!  Despite a tough, yet belated austerity plan and budget it is still not certain which way Spain’s socialist government will turn.  And Euro membership leaves the Spanish Government with no room for manoeuvre in its monetary policy.

We have recently seen Spain’s powerful union movement bring the country to a virtual standstill in a one-day general strike.  At the same time, international credit ratings agency Moody’s downgraded Spain’s credit rating – a dark sign of further trouble to come.

In the midst of the mess (and the abandoned and uncompleted building sites that seem to litter Spain from Galicia to Andalucía!), is Zapatero’s minority government that loses it’s grip further with every passing week, and makes the late Brown Administration look fresh, decisive and visionary by comparison.

José Luis Rodriguez Zapatero, the surprise winner of Spain’s 2004 General Election, was an ‘accidental’ Prime Minister.  Until just days before voting, Zapatero’s socialists had been lagging by between 6 to 8 points the seemingly unbeatable conservative Partido Popular (PP).  The grisly 11 March terrorist outrage on Madrid’s commuter trains, and a bungled response and handling by the then PM José Maria Aznar, turned-tables decisively in Zapatero’s favour.

Few Spanish socialists expected to win and the incoming government’s programme was decidedly light and ill thought-through as a result – beyond of course withdrawing Spanish troops from Iraq in grandstanding manner and declaring a cultural war on the Catholic Church (popular with some but viscerally unpopular with millions of others).

Zapatero transitioned fairly comfortably into a ‘fiesta’ leader, rather than a reformer.  The ‘noughties boom was coasted, business left alone etc.  Yet if it was the case that Blair/Brown failed to ‘fix the roof while the sun shined’, the Zapatero team avoided grappling with Spain’s biggest economic challenges – it’s restrictive labour market practices (which make sacking permanent employees practically impossible and force millions therefore into unstable short-term contract employment as a consequence).  To twist the cliché, ‘Spanish practices’ were and remain a huge block to Spain’s economic progress and make job instability and unemployment a reality for too many of its citizens.  At the same time Zapatero did nothing to check the ballooning property bubble which collapsed in 2008.

Many Spaniards had hoped that the surprise Zapatero win in 2004, would mean serious progress towards a permanent ceasefire or even a peace deal with Basque separatists and the terror group ETA.  Talks collapsed in 2006 and little tangible progress has been made since.  Despite transferring more powers to the Basque autonomous region, the Zapatero government has so far shown its lacks the agility and determination shown by John Major or Tony Blair in their efforts to make headway in the Northern Irish peace process.   Hope has been raised again following ETA’s offer, made via the BBC recently, of a temporary ceasefire.  You may recall the video clip – with the three ETA ‘generals’ wearing white balaclavas with enormous berets on top of their heads (in a sort of “Ku Klux Clan meets ‘Allo ‘Allo” style).

During the global economic crisis, Zapatero has ‘not had a good war’ .  Initially in denial about the extent of Spain’s plight, he has belatedly produced an austerity plan, mainly in response to panic in the Eurozone earlier this year and turmoil in Greece.  It is this austerity plan which brought ‘los hermanos’ (the brothers) out onto the streets in last week’s general strike as a warning shot to Zapatero from his one time biggest supporters. 

Zapatero will need more than a foxish agility to survive the next year.  He will need courage, a quality so far undemonstrated in his six year reign.  Events over the summer further stoked Spanish passions undermining the Spanish leader’s remaining political capital.

In August, Moroccan blockades of the Spanish enclave of Melilla, and alleged ‘harassment’ of Spanish policewomen at the Melilla-Moroccan frontier by Moroccan demonstrators, offended Spanish sensibilities and pride.  The Government’s belated and ‘gentle’ response was perceived as weak by both Spaniards and Morcoccans alike.    Partido Popular ratings leaped after ex-PM Aznar interrupted his family holiday in Marbella and hopped across to Melilla to proclaim the enclave eternally Spanish and slam Moroccan agitators, after which the Moroccan protests and blockades abated.

Throughout the summer and early autumn, the Spanish press has given fevered coverage to the battle for the socialist party candidacy for President of the Autonomous Region of Madrid.  Madrid is a PP stronghold, so whoever is chosen has dim prospects in next spring’s regional elections.  However, the selection battle is panning out as a proxy war for the control of the (centralised) Socialist Party.  Zapatero’s candidate is friend and Health Minister, Trinidad Jimenez.  It is rare in Spain for a party leader to have his nominee for an important and high-profile candidacy such as this be challenged, unless of course his authority is weakening.  The challenger in this instance is a feisty, fitness fanatic and Madrid Socialist senior functionary, Tomas Gomez.  If Gomez wins the nomination, it will be a very serious blow to Zapatero’s authority within his own party, and could well herald his own removal as party leader for the next national elections due in 2012.

Zapatero approaches 2011 weak and more than 10% behind the conservative opposition.  He is losing his grip on both his party and country.  Difficult regional elections are due in April, and he is dependent on Basque nationalists in parliament to get his legislation (and budget) through in parliament.

Failing something spectacular  Zapatero’s days are numbered.  His socialist government is reviled by many Spaniards as the worst government they’ve had since Franco died and the country transitioned to democracy (it received no ‘bounce’ after Spain won the World Cup!).  When it finally dies – Zapatero’s government will leave behind a country that is broke, more divided and uncertain about its future.   Whoever succeeds Zapatero will need to grapple with some very big questions (not least Spain’s position in the Euro-zone and the impact of austerity on an already dangerous level of unemployment) if Spain is to avoid spiralling into a decade or more of decline and decay.  Spain’s conservative PP will need more than punchy slogans and a charismatic leader over the next year, if they are to return to power and save Spain.   In the meantime, pour yourself a stiff Sangria and watch this space…

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